Rumor Mill: Apple Pitching $30 TV Subscription Service Via iTunes to Networks

By Clay Dillow Posted 11.02.2009 at 7:41 pm 6 Comments

The New Television? Rumor has it Apple is courting networks for a $30 subscription Web-TV service it hopes to have working by early next year, meaning Apple's a la carte television offerings might soon become a subscription-based replacement for cable.

The death of television and the advent of online-only programming has been upon us every week going back at least as far as the first Hulu stream, and perhaps much further depending on which rumor-monger blogs you subscribe to. But a rumor hit the Web today that, if true, has the potential to tip the scales toward a Web-delivered TV future faster than many might imagine: According to the AllThingsD, Apple is pitching a $30 subscription package to networks that would deliver TV over the Web to customers via iTunes, and it wants to get it up and running by early next year.

In Apple’s vision, networks would climb aboard the iTunes delivery system, offering their programming via Apple’s multimedia service, which Apple would deliver to iTunes users for $30 per month. Certainly some kind of revenue sharing deal would be involved, and networks could still monetize via advertising within their shows. Further appealing to customers and networks alike, Apple isn’t tying the service to a piece of hardware like its unimpressive Apple TV box, which would require customers to make an additional investment. Rather, by streaming the service through iTunes, Apple offers the networks a built-in base of 100 million accounts that already use the software, while turning any computer or handheld device sporting iTunes into a potential means of consumption.

The real question for Apple is this: will any of the networks actually get on board? Peter Kafka over at AllThingsD thinks if anyone jumps first, it will be Disney, since CEO Bob Iger has been open to jumping in bed with Apple in the past. That first big client will likely be the hardest one, so if Disney pulls the trigger, other media giants might be forced to follow suit.

But there are other complications. Cable companies have everything to lose by allowing such an arrangement, and will likely fight tooth and nail to remain the dominant medium for programming delivery. Cable networks have profitable relationships with those cable providers that they will be loath to jeopardize, and networks themselves will be troubled by the idea that offering programming via iTunes on a subscription basis–even if the shows don’t hit the service until after they’ve aired on traditional television–will cannibalize their own ratings, driving down ad rates.

But unlike failed attempts to bring television to consumers via the Web, Apple is no startup, and its ability to deliver customers may win out. The movement is already underway, with other large companies paving the way for Apple: Netflix bundles a streaming movie service with its mail subscription DVD service, Blockbuster, Amazon and iTunes already rent movies over the Web and Google is stepping into the fray by offering films through YouTube. Then there’s television’s own success story in Hulu, a joint-venture between three leading networks (NBC, ABC and Fox) to stream their content, with limited but mandatory advertising, over the Web.

Then there’s the delivery side of things; Apple has a lock on what are arguably two of the best mobile media delivery devices in the iPhone and iPod Touch, and should the much-ballyhooed Tablet come roaring onto the scene next year as rumored, Apple might have the best portable device for watching video media tied directly to iTunes. If the networks are willing to give Apple a chance, it might just be able to meet the converging demands of increased portability and on-demand choice right in the middle. Apple completely shook up the music business when it introduced iTunes; the potential is there for it to do the same to television.

[AllThingsD

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6 Comments

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Marrach

11/03/09 at 12:49 am

The thing is, I'm one of those users of the 'unimpressive Apple TV' and what the Geek Techmeisters fail to understand is that in the end, the Flatscreen TV or the Apple TV just fades into the background. It's just an end conduit for content. I don't SEE my Apple TV, I just turn it on to watch my shows.

That being said, iTunes, Netflix, Amazon are conditioning viewers to the Commercial Free Viewing Experience. Yeah-- Hulu is okay from time to time, but if it's a show I REALLY like, and it's available on iTunes, or Netflix or Amazon, I know I can get that show sans idiot commercials. It no longer matters if I can CHOOSE which commercial I watch. Watching Stargate Universe on iTunes COMMERCIAL FREE, versus tuning in to the Network and enduring Madison Avenue Idiocracy is no contest.

It isn't just the Sea-change of TV Content a la carte the Networks have to contend with-- it's the changed Advertising Ecology. The Viewer is No longer Trapped. The Networks are still working with an Advertising Model that still thinks it's 1970.

Doors are Amazing things. . .
They Separate,
They Delineate,
And they allow things to pass Through. . .

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ford2go

11/03/09 at 3:43 am

There's ont enough detail here to really understand all of what's being proposed.

What do you get for $30/ mo? Content that plays on your computer or iPhone? I guess that your home theater could be converted to a coffee table.

Plus the fee is for the iTunes delivery. You will still pay for whatever you use to access the web.

How about capacity? Airwaves offer half a dozen channels (free) 24 hours/day. Cable/sat offers many times that ( depending on the package). The web bandwidth equivalent would seem to be stupendous.

I can see this as a niche market.

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Daxcious

11/03/09 at 11:03 pm

This is the future of TV viewing. Commercials and even DVRs for recording "live" broadcasts need to go away. I want to download what I want to see and see it on my PC, AppleTV, or iPhone whenever I want without having to pay per episode (or season). I typically spend less then $10 per month on episodes but would gladly pay $30 for a subscription. An Apple TV subscription service would be fantastic!

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lnwolf41

11/04/09 at 1:51 pm

lnwolf41
How do you get your internet? mine is via a cable company.
if you have an I phone you go through a cell phone company for x amount of dollars then pay another $30.00 for internet TV. how much will it cost to download from iphone? since you can download a song for just 99 ents but then you pay the phone company for the bandwidth to get the song.also once they have you set up they'll up the price just like cable did.

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hypnometal

11/04/09 at 3:33 pm

I would think the cable companies would want to embrace this, because as has been stated, the cable companies can still offer broadband internet service for people to access iTunes and get their content. I don't know about anyone else, but I don't bother even considering DSL, because for that, you need a landline phone. But I have a cell phone, and I'm a household unto myself - what do I need a landline for? So I get my internet through the cable company.

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herbalife4life1

06/20/10 at 5:06 pm

I would say that you must not live in an area that is serviced by VDSL then or an area where the ceble company throttles you bandwidt and costs at least twice as much. Plus there is now ADSL, the older standard, that works without a phone line provided you are within 18,000 cable feet of a central office. AT&T's 3G and Verizon's 4G will both be able to handle the bandwidth needed for the TV service, even streaming SD and eventually HD when the software for AT&T or the hardware for Verizon are ready to handle it(supposedly end of 2010 for both companies, but in a drastically smaller area for Verizon)..but as in all techbology, i'll believe when I see it

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